Question
In the aggregate expenditures model, if an economy operates below equilibrium GDP, there will be unplanned inventory accumulation.
True
False
True
False
Answers
GPT-5 mini
False.
If actual GDP is below equilibrium, planned spending exceeds output, so firms experience unplanned inventory depletion (not accumulation). Unplanned inventory accumulation occurs when actual GDP is above equilibrium (output > planned spending).
If actual GDP is below equilibrium, planned spending exceeds output, so firms experience unplanned inventory depletion (not accumulation). Unplanned inventory accumulation occurs when actual GDP is above equilibrium (output > planned spending).